Wall Street's main indexes are climbing as a softer-than-expected inflation report boosted hopes of an early start to interest-rate cuts, while investors assessed a mixed bag of earnings reports from major lenders. The S&P 500 breached its record closing high of 4796.56 for a second day in a row, and is now about less than one per cent away from its all-time high of 4818.62 points. All the three major indexes are poised for weekly gains. Friday's data showed US producer prices unexpectedly fell in December amid a decline in cost of goods, while prices for services were unchanged. "It was a good report, it alleviates some of the concerns about inflation," said Robert Pavlik, senior portfolio manager at Dakota Wealth. The data brought some respite after Thursday's hotter-than-expected consumer inflation print. Following the latest data, traders' expectations for a 25-basis-point rate cut in March rose to nearly 78 per cent from 66.3 per cent, as per the CME Group's FedWatch Tool. Meanwhile, investors also assessed bank earnings reports to get a better picture of the health of corporate America. Bank of America slipped 0.9 per cent after its fourth-quarter profit shrank as the lender took $US3.7 billion ($A5.5 billion) in one-off charges. Wells Fargo beat profit expectations on cost cuts, but its warning that 2024 net interest income could be seven per cent to nine per cent lower year-on-year sent its shares down 1.5 per cent. JPMorgan Chase added 1.4 per cent after reporting its best ever annual profit and forecasting higher-than-expected interest income for 2024. Citigroup gained 2.2 per cent, even after an $US1.8 billion ($A2.7 billion) fourth-quarter loss. The lender also expects to further reduce its headcount. "The banks are very well capitalised, but are also going through the machinations of dealing with an inverted yield curve, less capital markets activity, likely less mortgage loan activity and just going through you know the aftershocks of the pandemic," said Art Hogan, chief market strategist at B Riley Wealth. The banking sector faced its worst turmoil since the 2008 financial crisis in March 2023, but finished the year with a seven per cent gain on hopes that the Federal Reserve could commence interest rate cuts in 2024. Limiting gains on the Dow, UnitedHealth fell 3.2 per cent on higher-than-expected medical costs. The health insurer, however, posted upbeat fourth-quarter profit. In early trading on Friday, the Dow Jones Industrial Average was up 48.50 points, or 0.13 per cent, at 37,759.52, the S&P 500 was up 20.05 points, or 0.42 per cent, at 4,800.29, and the Nasdaq Composite was up 71.06 points, or 0.47 per cent, at 15,041.24. Delta Air Lines fell 6.8 per cent after the carrier scaled down its annual profit outlook. Tesla declined 1.3 per cent after trimming prices of some new China models and plans to suspend most car production at its factory near Berlin. Advancing issues outnumbered decliners by a 6.87-to-1 ratio on the NYSE and a 3.86-to-1 ratio on the Nasdaq. The S&P index recorded 35 new 52-week highs and no new lows, while the Nasdaq recorded 45 new highs and 24 new lows.

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